Funded by the State Medicaid program, Medicare Savings Programs (MSPs) help eligible individuals meet some or all of their cost-sharing obligations under Medicare.  See N.Y. Soc. Serv. L. § 367-a(3)(a), (b), and (d).  There are three separate MSP programs, the Qualified Medicare Beneficiary (QMB) Program, the Specified Low Income Medicare Beneficiary (SLMB) Program and the Qualified Individual (QI) Program, each of which is discussed below. 

TOPICS COVERED IN THIS ARTICLE 

1.  No Asset Limit

2.  Income Limits & Rules  and Household Size 

3.  The Three MSP Programs - What are they and how are they Different? 

4.  FOUR Special Benefits of MSP Programs:

1. Back Door to Extra Help with Part D
2. MSPs Automatically Waive Late Enrollment Penalties for Part B
3. No Medicaid Lien on Estate to Recover Payment of Expenses Paid by MSP
4. Food Stamps/SNAP not reduced by Decreased Medical Expenses when Enroll in MSP - at least temporarily 

5.   Enrolling in an MSP - Automatic Enrollment & Applications 

6.   What Happens After MSP Approved - How Part B Premium is Paid

7.   Special Rules for QMBs - How Medicare Cost-Sharing Works 

8.   Summary Chart on the Three MSP Programs in NYS

1.    NO ASSET LIMIT!  

Since April 1, 2008, none of the three MSP programs have resource limits in New York -- which means many Medicare beneficiaries who might  not qualify for Medicaid because of excess resources can qualify for an MSP.   

2.    INCOME LIMITS and RULES

Each of the three MSP programs has different income eligibility requirements and provides different benefits.   The income limits are tied to the Federal Poverty Level (FPL). 

NOTE:  There is usually a lag in time of several weeks, or even months, after January 1st, between the time that the new FPLs are released before the new MSP income limits are officially implemented.   During this lag period, local Medicaid offices should continue to use the previous year's FPLs AND count the person's Social Security benefit amount from the previous year - do NOT factor in the Social Security COLA (cost of living adjustment).     Once the updated guidelines are released, districts will use the new FPLs and go ahead and factor in any COLA.   The new guidelines become effective as of January 1st.  You can get the current MSP income limits on the DOH MSP webpage and through the  General Information System (GIS) memo to local districts.          

2013 MEDICARE SAVINGS PROGRAM - NEW YORK STATE

Income is determined by the same methodology as is used for determining in eligibility for SSI

The rules for counting income for SSI-related (Aged 65+, Blind, or Disabled) Medicaid recipients, borrowed from the SSI program, apply to the MSP program, except for the new rules about counting household size for married couples.  N.Y. Soc. Serv. L. 367-a(3)(c)(2), NYS DOH 2000-ADM-7, 89-ADM-7 p.7.  Gross income is counted, although there are certain types of income that are disregarded. 

The most common income disregards, also known as deductions, include:

(a)  The first $20 of your & your spouse's monthly income, earned or unearned ($20 per couple max);

(b) SSI EARNED INCOME DISREGARDS:

*  The first $65 of monthly wages of you and your spouse,

*  One-half of the remaining monthly wages (after the $65 is deducted);

*   Other work incentives including PASS plans, impairment related work expenses (IRWEs), blind work expenses, etc.  For information on these deductions, see The Medicaid Buy-In for Working People with Disabilities (MBI-WPD) and other guides in this article -- though written for the MBI-WPD, the work incentives apply to all Medicaid programs, including MSP, for people age 65+, disabled or blind. 

(c) monthly cost of any health insurance premiums but NOT the Part B premium, since Medicaid will now pay this premium (may deduct Medigap supplemental policies, Part  D premium); 

(d) Food stamps not counted.

You can get a more comprehensive listing of the SSI-related income disregards on the Medicaid income disregards chart.

The NYS Department of Health has clarified that Medicaid's requirement to pursue potentially available income extends to the Medicare Savings Program (MSP). Per GIS 13 MA/05, as of March 2013, MSP applicants and recipients age 65 and older who are eligible for, but not receiving Social Security retirement benefits, must apply for Social Security as a condition of receiving MSP. 

Income placed in an SNT can also qualify someone for a Medicare Savings Program.   See Fair Hearing No. 4399513P (Nassau Co., Jan. 31, 2006)(available in WNYLC Online Resource Center, Fair Hearing Database, free registration required) 

HOUSEHOLD SIZE: Is Client considered “ONE” or “TWO” for using Income Limits?

As for all benefit programs based on financial need, it is usually advantageous to be considered a larger household, because the income limit is higher.    The above chart shows that Households of TWO have a higher income limit than households of ONE.  The MSP programs use the same rules as Medicaid does for the Disabled, Aged and Blind (DAB) which are borrowed from the SSI program for Medicaid recipients in the “SSI-related category.” Under these rules, a household can be only ONE or TWO. 18 NYCRR 360-4.2.

Married persons can sometimes be ONE or TWO depending on arcane rules, which can force a Medicare beneficiary to be limited to the income limit for ONE person even though his spouse who is under 65 and not disabled has no income, and is supported by the client applying for an MSP.

EXAMPLE:  Bob's Social Security is $1300/month.  He is age 67 and has Medicare.  His wife, Nancy, is age 62 and is not disabled and does not work.  Under the old rule, Bob was not eligible for an MSP because his income was above the Income limit for One, even though it was well under the Couple limit.

In 2010, NYS DOH modified its rules so that all married individuals will be considered a household size of TWO.  DOH GIS 10 MA 10 Medicare Savings Program Household Size, June 4, 2010.  This rule for household size is an exception to the rule applying SSI budgeting rules to the MSP program.   Under these rules, Bob is now eligible for an MSP. 

When is One Better than Two?  Of course, there may be couples where the non-applying spouse's income is too high, and disqualifies the applying spouse from an MSP.  In such cases, "spousal refusal" may be used  SSL 366.3(a).  (Link is to NYC HRA form, can be adapted for other counties).  

3.   The Three Medicare Savings Programs - what are they and how are they different?

1.  Qualified Medicare Beneficiary (QMB).   The QMB program provides the most comprehensive benefits.  Available to those with incomes at or below 100% of the Federal Poverty Level (FPL), the QMB program covers virtually all Medicare cost-sharing obligations:  Part B premiums, Part A premiums, if there are any, and any and all deductibles and co-insurance.  QMB coverage is not retroactive. The program’s benefits will begin the month after the month in which your client is found eligible.

**   See special rules about cost-sharing for QMBs below - updated with new CMS directive issued January 2012 

**   See new NYC HRA QMB Recertification form

**     Even if you do not have Part A automatically, because you did not have enough wages, you may be able to enroll in the Part A Buy-In Program, in which people eligible for QMB who do not otherwise have Medicare Part A may enroll, with Medicaid paying the Part A premium (Materials by the Medicare Rights Center).

2.  Specifiedl Low-Income Medicare Beneficiary (SLMB).  For those with incomes between 100% and 120% FPL, the SLMB program will cover Part B premiums only. SLMB is retroactive, however, providing coverage for three months prior to the month of application, as long as your client was eligible during those months.

3.   Qualified Individual (QI-1).  For those with incomes between 120% and 135% FPL, and not receiving Medicaid, the QI-1 program will cover Medicare Part B premiums only. QI-1 is also retroactive, providing coverage for three months prior to the month of application, as long as your client was eligible during those months.   However, QI-1 retroactive coverage can only be provided within the current calendar year. (GIS 07 MA 027)  So if you apply in January, you get no retroactive coverage. 

Q-I-1 recipients would be eligible for Medicaid with a spend-down, but if they want the Part B premium paid, they must choose between enrolling in QI-1 or Medicaid.  They cannot be in both.   It is their choice.  DOH MRG p. 19.  In contrast, one may receive Medicaid and either QMB or SLIMB.

4.    Four Special Benefits of MSPs (in addition to NO ASSET TEST): 

Benefit 1.  Back Door to Medicare Part D "Extra Help" or Low Income Subsidy --

All MSP recipients are automatically enrolled in Extra Help, the subsidy that makes Part D affordable.  They have no Part D deductible or  doughnut hole, the premium is subsidized, and they pay very low copayments.   Once they are enrolled in Extra Help by virtue of enrollment in an MSP, they retain Extra Help for the entire calendar year, even if they lose MSP eligibility during that year.

• The "Full" Extra Help subsidy has the same income limit as QI-1 - 135% FPL.  However, many people may be eligible for QI-1 but not Extra Help because QI-1 and the other MSPs have no asset limit.  People applying to the Social Security Administration for Extra Help might be rejected for this reason. 

• Recent (2009-10) changes to federal law called "MIPPA"  requires the Social Security Administration (SSA) to share eligibility data with NYSDOH on all persons who apply for Extra Help/ the Low Income Subsidy. Data sent to NYSDOH from SSA will enable NYSDOH to open MSP cases on many clients.   The effective date of the MSP application must be the same date as the Extra Help application.  Signatures will not be required from clients. In cases where the SSA data is incomplete, NYSDOH will forward what is collected to the local district for completion of an MSP application.  The State implementing procedures are in DOH 2010 ADM-03.    Also see CMS "Dear State Medicaid Director" letter dated Feb. 18, 2010

Benefit 2.   MSPs Automatically Waive Late Enrollment Penalties for Part B

If one does not enroll in Part B within the strict enrollment periods that depend on turning age 65, whether one is still working and insured under an employer sponsored group health plan, whether one has End Stage Renal Disease, and other factors, see this from Medicare Rights Center, one might have to pay higher Part B premiums for life as a Late Enrollment Penalty (LEP).  Enrollment in an MSP automatically eliminates such penalties... for life.. even if one later ceases to be eligible for the MSP.

Benefit 3.   No Medicaid Lien on Estate to Recover MSP Benefits Paid 

Generally speaking, states may place liens on the Estates of deceased Medicaid recipients to recover the cost of  Medicaid services that were provided after the recipient reached the age of 55.  Since 2002, states have not been allowed to recover the cost of Medicare premiums paid under MSPs.  In 2010, Congress expanded protection for MSP benefits.  Beginning on January 1, 2010, states may not place liens on the Estates of Medicaid recipients who died after January 1, 2010 to recover costs for co-insurance paid under the QMB MSP program for services rendered after January 1, 2010.  The federal government made this change in order to eliminate barriers to enrollment in MSPs.   See NYS DOH GIS 10-MA-008 - Medicare Savings Program Changes in Estate Recovery   The GIS clarifies that a client who receives both QMB and full Medicaid is exempt from estate recovery for these Medicare cost-sharing expenses.

Benefit 4.   SNAP (Food Stamp) benefits not reduced despite increased income from MSP - at least temporarily 

Many people receive both SNAP (Food Stamp) benefits and MSP.    Income for purposes of SNAP/Food Stamps is reduced by a deduction for medical expenses, which includes payment of the Part B premium.  Since approval for an MSP means that the client no longer pays for the Part B premium, his/her SNAP/Food Stamps income goes up, so their SNAP/Food Stamps go down.  Here are some protections:

• Do these individuals have to report to their SNAP worker that their out of pocket medical costs have decreased? And will the household see a reduction in their SNAP benefits, since the decrease in medical expenses will increase their countable income?

• The good news is that MSP households do NOT have to report the decrease in their medical expenses to the SNAP/Food Stamp office until their next SNAP/Food Stamp recertification. Even if they do report the change, or the local district finds out because the same worker is handling both the MSP and SNAP case, there should be no reduction in the household’s benefit until the next recertification. New York’s SNAP policy per administrative directive 02 ADM-07 is to “freeze” the deduction for medical expenses between certification periods. Increases in medical expenses can be budgeted at the household’s request, but NYS never decreases a household’s medical expense deduction until the next recertification. Most elderly and disabled households have 24-month SNAP certification periods.

• Eventually, though, the decrease in medical expenses will need to be reported when the household recertifies for SNAP, and the household should expect to see a decrease in their monthly SNAP benefit. It is really important to stress that the loss in SNAP benefits is NOT dollar for dollar. A $100 decrease in out of pocket medical expenses would translate roughly into a $30 drop in SNAP benefits.

• See more info on SNAP/Food Stamp benefits by the Empire Justice Center, and on the State OTDA website.  

5.   Enrolling in an MSP - Automatic enrollment & applications

Some clients will be automatically enrolled in an MSP by the New York State Department of Health (NYSDOH) shortly after attaining eligibility for Medicare. Others need to apply.

• WHO IS AUTOMATICALLY ENROLLED IN AN MSP:

  • Clients receiving even $1.00 of Supplemental Security Income should be automatically enrolled into a Medicare Savings Program (most often QMB) under New York State’s Medicare Savings Program Buy-in Agreement with the federal government once they become eligible for Medicare. They should receive Medicare Parts A and B. 

  • Clients who are already eligible for Medicare when they apply for Medicaid should be automatically assessed for MSP eligibility when they apply for Medicaid. ( NYS DOH 2000-ADM-7 and GIS 05 MA 033).

  • Clients who apply to the Social Security Administration for Extra Help, but are rejected, should be contacted & enrolled into an MSP by the Medicaid program directly under new procedures that require data sharing. 

    • Strategy TIP:  Since the Extra Help filing date will be assigned to the MSP application, it may help the client to apply online for Extra Help with the SSA, even knowing that this application will be rejected because of excess assets or other reason.  SSA processes these requests quickly, and it will be routed to the State for MSP processing.  Since MSP applications take a while, at least the filing date will be retroactive.  

• Applying for MSP Directly with Local Medicaid Program.  Clients who are not receiving any SSI, and have not applied for the Low Income Subsidy assistance with Medicare Part D or Medicaid, will need to apply for an MSP.  Clients can apply through their local social services district.  

  If you are applying for MSP only (not also Medicaid), you can use the simplified MSP application form (the DOH-4328).   Either application form can be mailed in -- there is no interview requirement anymore for MSP or Medicaid.  See 10 ADM-04. 

  Applicants will need to submit proof of income, a copy of their Medicare card (front & back), and proof of residency/address.

One who is only eligible for QI-1 because of higher income may ONLY apply for an MSP, not for Medicaid too.  One may not receive Medicaid and QI-1 at the same time. If someone only eligible for QI-1 wants Medicaid, s/he may enroll in and deposit excess income into a pooled Supplemental Needs Trust, to bring their countable income down to the Medicaid level, which also qualifies him or her for SLIMB or QMB instead of QI-1. 

Advocates in NYC can sign up for a half-day "Deputization Training" conducted by the Medicare Rights Center, at which you'll be trained and authorized to complete an MSP application and to submit it via the Medicare Rights Center, which submits it to HRA without the client having to apply in person. 

CLIENTS WITHOUT MEDICARE PART A or B -- They may be able to enroll in the Part A Buy-In program, in which people eligible for QMB who do not otherwise have Medicare Part A may enroll in Part A, with Medicaid paying the Part A premium (Step-by-Step Guide by the Medicare Rights Center).   See also GIS 04 MA/013.

• Enrolling in an MSP if you already have Medicaid, but just become eligible for Medicare

  • Medicaid recipients who transition onto Medicare should be automatically evaluated for MSP eligibility at their next Medicaid recertification. NYS DOH 2000-ADM-7  Individuals can also affirmatively ask to be enrolled in MSP in between recertification periods.

  • Some individuals may lose full Medicaid eligibility when they begin receiving Medicare (ie, because of new Social Security income). If a Medicare/Medicaid recipient reports income that exceeds the Medicaid level, districts must evaluate the person’s eligibility for MSP. 08 OHIP/ADM-4

  • Individuals who are eligible for Medicaid with a spenddown can opt whether or not to receive MSP. (Medicaid Reference Guide (MRG)  p. 19) Obtaining MSP may increase their spenddown.

• Outreach by Social Security Administration -- The SSA sends a form letter to people who may be eligible for a Medicare Savings Program or Extra Help (Low Income Subsidy - LIS) that they may apply.   The letters are:

  §         SSA-L447 http://www.socialsecurity.gov/legislation/SSA-L447.pdf
  ·        Beneficiary has Extra Help (LIS), but not MSP
  §         SSA-L448 http://www.socialsecurity.gov/legislation/SSA-L448.pdf
  ·        Beneficiary has no Extra Help (LIS) or MSP

6.   What happens after the MSP approval - How is Part B premium paid

• For all three MSP programs, the Medicaid program is now responsible for paying the Part B premiums,  even though the MSP enrollee is not necessarily a recipient of Medicaid.

• The local Medicaid office (DSS/HRA) transmits the MSP approval to the NYS Department of Health – that information gets shared w/ SSA and CMS

  • SSA stops deducting the Part B premiums out of the beneficiary’s Social Security check. SSA also refunds any amounts owed to the recipient. (Note: this process can take awhile!!!)

  • CMS “deems” the MSP recipient eligible for Part D Extra Help/ Low Income Subsidy (LIS).

7.    QMBs -Special Rules on Cost-Sharing.  QMB is the only MSP program which pays not only the Part B premium, but also the Medicare co-insurance. 

• In an Informational Bulletin issued January 6, 2012, titled "Billing for Services Provided to Qualified Medicare Beneficiaries (QMBs)," the federal Medicare agency - CMS - clarified that providers MAY NOT BILL QMB recipients for the Medicare coinsurance.  This is true whether or not the provider is registered as a Medicaid provider.  If the provider wants Medicaid to pay the coinsurance, then the provider must register as a Medicaid provider under the state rules.  This is a change in policy in implementing Section 1902(n)(3)(B) of the Social Security Act (the Act), as modified by section 4714 of the
  Balanced Budget Act of 1997, which prohibits Medicare providers from balance-billing QMBs for Medicare cost-sharing.  The CMS letter states,

"All Medicare physicians, providers, and suppliers who offer services and supplies to QMBs are prohibited from billing QMBs for Medicare cost-sharing, including deductible, coinsurance, and copayments. This section of the Act is available at:
CMCS Informational Bulletin http://www.ssa.gov/OP_Home/ssact/title19/1902.htm. QMBs have no legal obligation to make
further payment to a provider or Medicare managed care plan for Part A or Part B cost sharing.
Providers who inappropriately bill QMBs for Medicare cost-sharing are subject to sanctions.
Please note that the statute referenced above supersedes CMS State Medicaid Manual, Chapter 3, Eligibility, 3490.14 (b),  which is no longer in effect, but may be causing confusion about QMB billing."

The same information was sent to providers in this Medicare Learning Network bulletin.

• This can get tricky because some of the individual's medical providers may accept only Medicare, and not Medicaid.  But even in this case QMB clients do not have to pay the Medicare coinsurance!  Here's how it should work:

  • QMBs are issued a Medicaid benefit card (by mail), even if they do not also receive Medicaid. The card is the mechanism for health care providers to bill the QMB program for the Medicare deductibles and co-pays.  

  • According to the CMS January 2012 bulletin, the providers must enroll as Medicaid providers in order to bill Medicaid for the Medicare coinsurance.  If the provider chooses not to enroll as a Medicaid provider, it still may not "balance bill" the QMB recipient for the coinsurance.  

  • Medicaid is then required to pay the provider for all Medicare Part A and B cost-sharing charges, even if the service is normally not covered by Medicaid  (ie, chiropractic, podiatry and clinical social work care).  Whatever reimbursement Medicaid then pays the provider constitutes by law payment in full, and the provider cannot bill the beneficiary for any difference remaining. 42 U.S.C. § 1396a(n)(3)(A),  NYS DOH 2000-ADM-7

  • See CMS Medicare Learning Network (MLN) Article: “Medicaid Coverage of Medicare Beneficiaries (Dual Eligibles): At a Glance"

  • If QMB beneficiary is in a Medicare Advantage plan - the provider bills the Medicare Advantage plan then bills Medicaid for the balance using a “16” code to get paid. The provider must include the amount they received from Medicare Advantage plan.  

  • Provider questions about QMB billing and eligibility should be directed to the Computer Science Corporation 1-800-343-9000

8.     Summary Chart on Medicare Savings Programs in New York State

This article was authored by the Empire Justice Center.